US scrap prices for May delivery are expected to settle $20-40/gt ($20-41/mt) less than their April counterparts as a result of continued reports of plentiful inventory levels at local scrap yards, amid an expectation for reduced May demand from domestic steel producers, market insiders told SteelOrbis.
Market insiders claim May scrap contract negotiations could yield a “no-buy, limited buy, or reduced buy scenario" from many domestic mills during the ongoing monthly buy cycle.
“Lots of furnaces have been idled, and some mills are out of the scrap market for May,” commented one Midwest scrap insider reflecting on the lower price levels and limited demand expectations for May.
As it still remains fairly early in monthly supply negotiations, May price expectations remained fluid at press time.
“Not much is really going on this month for May scrap because of low demand,” said another scrap insider. “We are hearing that one mill is looking at down $50/gt for May (shredded) scrap, but that’s just talk right now.”
“High levels of supply are still driving lower May price expectations,” commented one Midwest mill scrap buyer. “We’re also seeing very poor export opportunities for East Coast scrap.”
In the US Midwest, May busheling scrap in the Ohio Valley is seen $20/gt less at $445-470/gt ($452-478/mt), while May shredded scrap could settle $40/gt ($41/mt) lower at $375-$380/gt ($381-386/mt). May HMS and P&S cut grades are seen on average $30/gt ($30/mt) less at $335-355/gt ($340-361/mt), and $371-381/gt ($377-387/mt) respectively, scrap insiders said.
On the US East Coast, flagging export demand and continued reports of high inventory levels at local East Coast yards are causing scrap prices to dip for a second month, insiders told SteelOrbis.
May Busheling scrap is seen $30/gt ($30/mt) less at $380-400/gt ($386-406/mt), while shredded scrap is seen $40/gt ($41/mt) less at $325-335/gt ($330-340/mt). Cut grades HMS and P&S scrap for May delivery are called $40/gt ($41/mt) lower at $305-320/gt ($310-325/mt), and $295-305/gt ($300-310/mt), respectively.
